Exhibit 10.42

                                     LEASE

         THIS LEASE,  entered  into as of the 19 day of January,  1999,  by and
between  HORVATH & HORVATH,  LLC, its successors and assigns,  ("Lessor"),  and
TRANSIT GROUP TRANSPORTATION, LLC ("Lessee").

                                   ARTICLE I.

                                    Premises

         Section 1. The following  exhibits are incorporated  herein and made a
part of this Lease:

         Exhibit "A-1"              Legal Description

         Section 2. Lessor does  hereby  lease unto the Lessee,  and the Lessee
does hereby take as lessee,  the following  described real property situated in
DeSoto County, Mississippi, to-wit:

         The parcel known as 7585 Priority Lane, Olive Branch,  Mississippi,  a
         legal description which is shown on the attached Exhibit "A-1".

together  with  rights,   easements  and   appurtenances   thereto   belonging,
hereinafter  called the "Premises,"  subject  nevertheless to: (1) any state of
facts an accurate  survey may show; (2) rights and easements,  if any, in favor
of any public utility company,  including,  but not limited to, gas,  electric,
water,  telephone,  and sewer  easements;  (3) present and future  valid zoning
laws,  ordinances,  resolutions and regulations of any  governmental  authority
having or  asserting  jurisdiction,  and all  present  and  future  ordinances,
statutes,  laws, regulations,  and order of all boards,  bureaus,  departments,
agencies,  commissions  or bodies or any  municipal,  county,  state or federal
sovereigns,  now or  hereafter  acquiring or  asserting  jurisdiction  over the
leased property;  (4) the effect of all present and future municipal,  state or
federal  laws,  orders  and  regulations  relating  to Lessee,  sublessees,  or
occupants of the  Premises,  their rights and rentals to be charged for the use
of the leased property or any portion  thereof;  (5) liens and  encumbrances of
record; (6) the provisions, restrictions,  reservations, and easements provided
in this  Lease;  and (7)  Restrictive  Covenants,  if  any,  applicable  to the
subdivision in which the Premises is located.

                                  ARTICLE II.

                                  Term/Renewal

         Section 1. This Lease  shall be  effective  as of the date hereof (the
"Commencement  Date") and shall be in effect  throughout  the  "Lease  Term" as
hereinafter defined.

         Section 2. The Lease Term of this Lease  shall be for a period of five
(5) years commencing on January 19, 1999, and ending on January 18, 2004.

         Section 3. Upon giving six (6) months prior written  notice to Lessor,
Lessee  shall  have  the  option  to elect  early  termination  of this  Lease;
provided,  however,  that Lessee shall pay to Lessor an Early  Termination Fee.
The  amount of the  Early  Termination  Fee shall be a sum equal to $3,250  per
month for the period from the effective  date of such early  termination  until
January 18, 2004,  prorated for the 18-day  period from January 1, 2004 through
January 18, 2004. The Early  Termination Fee will be due and payable each month
in the same manner as the Base Rent payments.

                                  ARTICLE III.

                                     Rental

         Section 1. Lessee  shall pay as base rent ("Base  Rent" in  accordance
with the following schedule:

         1/19/99 to 1/18/2004   $7,250.00  per month,  prorated for any 
partial  month  based upon the number of days within the Lease
                              
                                     Term.

         Base Rent shall be payable in monthly  installments  in advance on the
first (1st) day of each and every calendar month during the Lease Term. If Base
Rent,  Additional  Rent,  or any other  payment owed to Lessor by Lessee is not
paid within five (5) days after Lessee has received  written notice of Lessor=s
failure to receive such payment,  Lessee shall pay to Lessor upon demand a late
payment fee of five percent (5%) of the delinquent obligation.

         This Lease is a net-net-net  lease (with Lessee to pay, in addition to
Base Rent, all taxes,  insurance,  ordinary maintenance (as provided in Article
VII),  janitor  expenses,   utilities,   pest  control,  any  tax  assessments,
assessments pursuant to the subdivision Restrictive Covenants, window cleaning,
grounds maintenance,  interior and exterior lighting, interior painting, window
and door repairs and refinishing,  as additional rent [the "Additional  Rent"],
except Structural Repairs [as hereinafter defined]),  and all rentals and other
expenses  owing  hereunder  by Lessee  shall be paid in all events and  without
notice or  demand,  and  without  counterclaim,  set off,  deduction,  defense,
abatement,  suspension,  deferment or diminution of any kind. It is the express
intent  and  understanding  that at no time  throughout  the term of this Lease
shall the  rentals  provided  for herein be reduced by any taxes,  assessments,
charges,  insurance premiums and expenses,  utilities,  maintenance charges and
expenses,  or other costs or expenses owing  hereunder by Lessee related to the
building, and that rentals shall be absolutely net-net-net to Lessor.

                                  ARTICLE IV.

                           Building and Improvements

         Section 1.  The buildings,  structures,  parking areas,  drives and 
other improvements on the Premises are hereinafter sometimes jointly called 
the AImprovements.@

         Section 2. Lessor shall be  responsible  for keeping the  structure of
the  Improvements  in good repair which shall  include  paving the parking lot,
roof repair,  repair to the structure of the buildings,  replacement and repair
of plumbing in excess of $500 and replacement and repair of heating and cooling
systems,  but not  repairs  caused by the  negligence  of  Lessee  (AStructural
Repairs@).  Lessee may, upon obtaining  Lessor's prior written  approval of all
plans and specifications and proposed contractors,  which approval shall not be
unreasonably  withheld,  erect fencing on the Premises,  and such fencing shall
become a part of the  Improvements.  In addition,  Lessee may,  upon  obtaining
Lessor's prior written  approval of all plans and  specifications  and proposed
contractors,  construct  Lessee's  tenant  improvements,  if any  (the  ATenant
Improvements@),  at its sole cost and expense.  Lessee  agrees to construct and
maintain said Tenant Improvements in accordance with the following conditions:

         (a)  Lessee  agrees  that  the  Tenant  Improvements,  as  well as any
alterations  or repairs  to or in and about the  Premises  or any  Improvements
thereon  made by Lessee shall be in  compliance  with the  applicable  laws and
ordinances.

         (b) Lessee agrees that the Tenant Improvements shall, at Lessee's sole
cost and expense,  be removed from the Premises at the expiration of this Lease
and  the  Premises  restored  to  their  original   condition  and  appearance,
reasonable wear and tear excepted, unless Lessor and Lessee agree otherwise.

         Section 3. Lessee  shall be entitled  to  terminate  this Lease if any
Structural  Repairs  necessary for Lessee=s  operations on the Premises are not
completed by Lessor within a reasonable period of time (not to exceed 180 days)
after written notice from Lessee to Lessor.

                                   ARTICLE V.

                                Use of Premises

         Section 1. The  Premises  shall be used solely for the  operation of a
trucking  terminal  and  distribution  facility  with related  offices,  all in
accordance with all applicable law.

         Section 2. All  utilization  of the  Premises  shall be subject to the
terms and conditions of this Lease.

         Section 3.  Lessee  shall not use or permit to be used any part of the
Improvements on the Premises for any disorderly or illegal  purposes or for any
dangerous,  noxious or offensive trade or business and will not cause, maintain
or allow any nuisance in, at or on the Premises or Improvements.  Lessee agrees
and covenants  that Lessee will take  appropriate  measures to prevent and will
not engage in or knowingly permit any illegal  activities at the Premises,  and
that Lessee will comply with all laws, ordinances, regulations and requirements
of any  governmental  body or  authority  relating to the  Premises  including,
without  limitation,   all  laws,  ordinances,   regulations  and  requirements
pertaining  to health and life  safety,  construction  of  Improvements  on the
Premises,  zoning and land use.  Lessee hereby  represents and warrants that no
portion of the  Premises  or  Improvements  has been or will be funded with the
proceeds  of any  illegal  activity.  Lessee  shall not  commit or permit to be
committed any waste upon the Premises or Improvements.

                                  ARTICLE VI.

                                     Taxes

         Section 1. This Lease shall be a "net-net-net" Lease to Lessor. Lessee
shall pay, on or before the last day when payment can be made without  interest
or  penalty,  all taxes  levied upon and  assessed  against  the  Premises  and
Improvements which are due and payable during the Lease Term. Paid tax receipts
or other  evidence of such  payment  shall be sent by Lessee to Lessor prior to
any such taxes  becoming  delinquent  or subject to any  penalties or interest.
Taxes assessed covering a fractional year at the commencement or termination of
this Lease shall be prorated  between  the  parties  provided  that if any such
taxes are  assessed  only for the  portion of the year during  which  Lessee is
entitled to possession  of the  Premises,  then Lessee shall pay all such taxes
for such  portion of the year.  Lessor shall ensure that all bills which Lessor
receives,  if any, for taxes and any other  government  charges which are to be
paid by Lessee are sent or forwarded to Lessee within sufficient time to permit
timely  control  thereof  and/or  remittance  in the normal course of business,
provided that Lessee shall contact all taxing authorities and request copies of
all tax statements to be sent directly to Lessee.

         Section 2. Special tax assessments, if any, lawfully applicable to the
Premises shall be paid by Lessee. Those installments which were due and payable
before the  commencement of the original term of the Lease or which are due and
payable after the termination of the Lease shall be the sole responsibility and
expense of the Lessor.  Lessor shall give to Lessee  timely  notice of, and any
opportunity to participate in, all hearings and negotiations  regarding special
tax assessments affecting the Premises.

         Section 3.  Lessee  shall  have the right in its name,  or the name of
Lessor if required, to contest or review by administrative or legal proceedings
all or any part of any tax or special  assessment  which  Lessee is required to
pay hereunder.  Lessor shall cooperate, but without incurring any monetary cost
or expense,  in such  reasonable  ways as may be  necessary to further any such
procedure by Lessee. The party contesting any tax, assessment charge or lien of
any kind so long as the matter  shall  remain  undetermined  by final  judgment
shall not be  considered  in  default  hereunder  for the  nonpayment  thereof;
provided,  however,  that neither party may under these  provisions  permit the
Premises or Improvements situated thereon to be sold or forfeited,  and failure
by the  contesting  party to do what is  necessary  to prevent any such sale or
forfeiture  within ten (10) days from the  publication  or receipt of notice of
sale or  forfeiture  shall be deemed to be a default  hereunder;  and  provided
further,  that  Lessee,  at the  request of  Lessor,  shall  furnish  assurance
reasonably satisfactory to Lessor that Lessee will indemnify the Lessor against
any loss or liability by reason of such  contest.  Lessor and Lessee shall each
give to the other timely notice of, and an opportunity  to participate  in, all
hearings and negotiations regarding such taxes and assessments.
<PAGE>
         Section 4. Any sales tax, rental tax, gross receipts,  or other tax or
charge  (except  for state or federal tax on net income or any  inheritance  or
estate  tax),  which may at any time  during the term of this Lease  become due
from Lessor on account of receipt of or right to receive rental  payments under
the  terms of this  Lease,  shall be  payable  by Lessee  or its  successor  in
interest.

                                  ARTICLE VII.

                                  Maintenance

         Section 1. Lessee,  at Lessee's  expense,  shall keep the Premises and
Improvements in good and  satisfactory  order and repair,  replacing all broken
glass with glass of the same size and  quality of that  broken,  shall keep the
Premises,  Improvements and all things connected therewith,  including adjacent
sidewalks, driveways, ramps, parking areas, and private roadways in a clean and
healthy  condition and in good repair,  and Lessor shall maintain the structure
of the Improvements and the related Structural Repairs, in each case consistent
with  standards  in  DeSoto  County,   Mississippi,   for  comparable  trucking
terminals, distribution facilities, and related offices, and in accordance with
the  laws  and  ordinances  of  each  municipal,  county,  state,  and  federal
jurisdiction and the direction of the public officers having  jurisdiction over
the Premises or the  Improvements,  during the term of this Lease, at their own
expense,  respectively.  On the  termination of this Lease,  in any way, Lessee
will yield up the Premises and the Improvements to Lessor in good condition and
repair,  loss by fire or other  casualty and ordinary  wear and tear  excepted.
Neither  Lessor nor Lessee shall,  during the term of this Lease or thereafter,
be required to make any repairs,  replacements,  or capital improvements to the
Premises and Improvements which are not specifically provided for herein.

         Section 2. If the  Premises,  Improvements,  and the other items above
mentioned are not kept in repair by Lessee or Lessor,  as  hereinabove  agreed,
the other party may give the  defaulting  party not less than thirty (30) days'
notice (however, if the repairs complained of require immediate attention, then
reasonable  notice shall be given as the  circumstances  demand) demanding that
such party make the required repairs. If the defaulting party does not promptly
undertake to make such repairs, the other party may at the expiration of thirty
(30) days after such notice,  or at the expiration of such reasonable notice if
such  repairs are urgent,  as the case may be, have the repairs made and charge
the cost thereof to the defaulting party.

                                 ARTICLE VIII.

                                   Utilities

         Section 1. Lessee shall pay all charges for steam,  gas,  electricity,
lights,  water, heat, power and other services used in and for the Premises and
Improvements and shall indemnify and hold Lessor harmless against any liability
on such  account.  Lessor  shall  grant  to the  utility  boards  and  agencies
reasonable  easements and permits to allow the  construction of such service to
Lessee.

                                  ARTICLE IX.

                                   Insurance

         Section 1. During the term of this Lease,  the Lessee  agrees to keep,
at its  expense,  the  Improvements  located  on the  Premises,  insured on the
so-called  "all risk"  form,  with  endorsements  (including  loss of rents) as
reasonably  required  by  Lessor,  in an amount  not less  than that  currently
maintained on the Premises by Lessor.  All such policies  shall be in companies
mutually  acceptable to Lessor and Lessee, and shall name the Lessor and Lessee
as insureds as their  respective  interests  may  appear.  Notwithstanding  the
foregoing  provisions,   such  policy  may  contain  a  lender's  loss  payable
endorsement  in favor of any  persons,  firms  or  corporations  who may have a
mortgage  lien on the  Premises.  Prior to Lessee's  taking  possession  of the
Premises  and  throughout  the term of the  Lease,  Lessee  agrees  to  furnish
evidence to Lessor  from time to time that the  required  insurance  is in full
force. Notwithstanding the foregoing provisions,  Lessor shall bear the expense
of builder's  risk insurance  with respect to  construction  to be performed by
Lessor's  contractor,  and Lessee  shall bear the  expense  of  builder's  risk
insurance with respect to construction to be performed by Lessee's contractor.

         Section 2. Lessee shall,  during the entire term hereof,  keep in full
force and effect a policy of public  liability  insurance  with  respect to the
Premises  and the  business  operated by Lessee in which both Lessor and Lessee
shall be named as parties  covered  thereby  in which the  limits of  liability
shall not be less than the  greater  of (a)  $5,000,000.00,  or (b) the  limits
customarily maintained for similar businesses. Lessee shall furnish Lessor with
a certificate or  certificates of insurance or other  acceptable  evidence that
such insurance is in full force at all times during the term hereof.

         Section  3.  All  insurance  provided  for in this  Article  or  other
Articles of this Lease shall be effected under valid and  enforceable  policies
issued by  insurers  of  recognized  responsibility  authorized  to issue  such
insurance in the State of Mississippi.  Not less than thirty (30) days prior to
the expiration  dates of the policies  theretofore  furnished  pursuant to this
Article IX,  originals  of the renewal  policies  for such  insurance  shall be
delivered  by  Lessee  to  Lessor,  except  that  the  Lessee  may,  in lieu of
delivering  the originals of the policies,  deliver to Lessor  certificates  of
insurance.  Within thirty (30) days after the premium of each such policy shall
become due and  payable,  and the amount  thereof  determined,  Lessor shall be
furnished  by Lessee with  evidence  satisfactory  to Lessor of such payment by
Lessee.

         Section  4.  In the  event  of a loss  payable  under  said  insurance
policies,  the proceeds thereof,  with the consent of and subject to the rights
of any  lender or  lenders  who may from time to time hold  loans for which the
Premises are security, shall be used in the following manner:

         (a) In the  event  that  loss  results  from  damage  which  Lessee is
obligated  to repair  under the  provisions  of Article X hereof,  the proceeds
shall be used to pay the cost of such repairs.

         (b)  In  the  event  that  loss  results  from  total  or  substantial
destruction of the Improvements and Lessee rebuilds said Improvements under the
provisions  of  Article X hereof,  then  such  proceeds  shall be used for such
rebuilding,  with any balance  remaining  being paid to Lessee  (subject to any
rights of lenders as provided in Article X).

         (c)  In  the  event  loss  results  from  total   destruction  of  the
Improvements and Lessee cannot rebuild within 180 days pursuant to Section 1 of
Article X herein, then the proceeds from such loss will first be used to pay in
full any loan for which the Premises  are  security  and the  balance,  if any,
shall  be paid to  Lessor,  and  Lessee  shall  have the  right to  immediately
terminate this Lease without penalty.

         Section 5. To the extent permitted  without  invalidating the policies
of  insurance  required  pursuant to this Lease,  Lessor and Lessee each hereby
release and waive all right of recovery against each other, irrespective of any
carelessness or negligence, for any loss or damage sustained to the property of
the  other,  to the extent  such loss or damage is covered  under the terms and
provisions  of any policy of insurance  in force at the time of such loss,  and
Lessor and Lessee,  to the extent permitted as aforesaid,  each agree to assign
any  subrogation  rights  against the other to any  insurer.  This  release and
waiver of  subrogation  shall extend to such losses and amounts  thereof as are
covered by insurance as provided herein,  and shall not release Lessee from its
undertaking to provide insurance as provided in this Lease. It is intended that
the  provisions of this  paragraph of this Lease be construed  consistently  to
give the parties the fullest  benefit of any available  insurance  proceeds and
protection.  Each party  agrees,  to the extent  the same may be  required,  to
notify  its  insurance  carriers  of the  pertinent  provisions  of this  Lease
respecting insurance, indemnity, and subrogation.

                                   ARTICLE X.

                                  Destruction

         Section 1. In the event that the  Improvements or any part thereof are
partially or totally  destroyed by fire or other casualty so that repair can be
completed within 180 days (so as to not render the  Improvements  unfit for the
purpose for which they were  constructed)  at any time or times during the term
of this  Lease,  Lessor  shall  have the  option  to elect (i) to  rebuild  the
Premises,  but only to the extent of any insurance proceeds available therefor;
or (ii) to require  Lessee to commence the work of repair or  replacement  with
due diligence and carry the work of repair or replacement through to completion
without undue  interruption or delay, other than interruptions or delays beyond
the control of Lessee.  In such event,  Lessee shall be entitled to receive the
proceeds of the insurance,  hereinbefore  required under Article IX hereof,  to
pay for the cost of such repairs or replacements.
         Section  2. In the event  that the  lender or  lenders  holding  loans
secured by said Premises at the time of said total or  substantial  destruction
shall refuse to consent to the use of said  proceeds for  rebuilding  but shall
require the same to be applied to the  payment of their loan,  then and in that
event, the proceeds shall be collected and remitted to Lessor and the lender as
their respective interests may appear and this Lease shall terminate.

                                  ARTICLE XI.

                           Covenant to Hold Harmless

         Section 1. Lessor shall not be liable to Lessee or to any other person
in or about the  Premises  for any loss,  damage or injury  sustained  by them,
unless caused by Lessor's gross negligence or willful misconduct.

         Section 2. Lessee  covenants  and agrees to pay all costs and expenses
and assume all  liabilities  of any kind or nature arising out of or in any way
connected  with  Lessee's  (or any  affiliate of Lessee) use of the Premises or
Improvements, unless caused by Lessor's gross negligence or willful misconduct,
and  covenants  and agrees  that it will  indemnify,  defend and hold  harmless
Lessor from all  liability,  loss,  cost,  damage,  expenses and  judgments and
injury to persons or  property  arising  therefrom,  unless  caused by Lessor's
gross  negligence  or willful  misconduct.  Except as set forth in Article  XV,
Lessee shall not give cause for the filing of any liens  against the  Premises,
except for liens which arise because of bona fide  disputes  between the Lessee
and any contractor or subcontractor,  in which case said liens shall be bonded,
and in any event Lessee agrees that any lien claims will be satisfied  prior to
execution of any judgment.

         Section 3. Lessor agrees to indemnify, defend and save Lessee harmless
against and from any and all claims,  loss,  liability,  damage, cost or injury
arising from or out of any acts of gross  negligence  or willful  misconduct of
Lessor, or any of its agents, contractors,  servants,  employees,  licensees or
sublicensees.

                                  ARTICLE XII.

                                 Eminent Domain

         Section 1. If the whole or any part of the Premises  shall be taken by
public  authority  or any  entity  entitled  to  exercise  the power of eminent
domain,  then the term of this Lease  shall cease on the part so taken from the
date possession of that part shall be taken by the condemnor and the rent shall
be paid up by Lessee to that date.  All proceeds  received for the Premises and
Improvements shall, as between Lessor and Lessee,  belong solely to Lessor. All
proceeds  received for the Tenant  Improvements  and Lessee's  moving  expenses
shall,  as  between  Lessor and  Lessee,  belong  solely to Lessee.  Each party
reserves  the right to  contest  any  award  made by the  condemning  authority
applicable  to a taking of such party's  interest.  If the portion taken by any
public  authority  or other  entity  entitled to exercise  the power of eminent
domain or the sum of the portions in the case of  additional  taking is such as
to  make  Lessee's  operations  on the  Premises  economically  nonfeasible  in
Lessor's  reasonable  judgment,  then from the day that Lessee  first  receives
notice of the  intention of the public  authority  or other entity  entitled to
exercise the power of eminent  domain,  then Lessee  thereafter  shall have the
right for a period  of ninety  (90) days to  terminate  this  Lease by  serving
written notice upon the Lessor within said ninety (90) day period. In the event
Lessee does not exercise said right to terminate  this Lease within said ninety
(90)  day  period,  or if  said  taking  is such as not to  entitle  Lessee  to
terminate this Lease,  then this Lease shall continue and Lessee shall continue
in the  possession  of the  remainder  of the  Premises  under the terms herein
provided,  and there shall be no reduction in rental.  In the event that Lessee
elects  the  limited  option to  terminate  this Lease in  accordance  with the
provisions of this Article XII, and the condemning agency  thereafter  abandons
its  intention to exercise its right of eminent  domain,  then the Lessee shall
have thirty (30) days from and after the date Lessee  receives  written  notice
from Lessor or from said  condemning  agency  (whichever  first  occurs) of the
abandonment  of such  intention  in which  Lessee can rescind  its  exercise of
option to terminate  provided  that Lessee is not in default under the terms of
said Lease.

         Section 2. If at the time of payment of any  condemnation  award,  the
Lessee or its  successor is indebted to Lessor or its successor for rent or for
any other sum due  pursuant to the terms of this Lease,  then said sum shall be
paid to Lessor from any sum otherwise due to Lessee or its successor  from said
condemnation award.

                                 ARTICLE XIII.

                          Warranty and Quiet Enjoyment

         Section  1.  Subject  to the  exceptions  set forth in  Article I, the
Lessor  covenants  and warrants  that Lessor has a good and fee simple title to
the Premises legally  described in Article I and that Lessor has full right and
lawful  authority to enter into this Lease for the full term  hereof,  and that
Lessee,  on paying the rent and performing  all of the other terms,  conditions
and provisions of this Lease to be performed by the Lessee, shall peaceably and
quietly have, hold and enjoy the Premises  without  hindrance by Lessor for the
full term of this Lease,  subject to the provisions  herein  contained.  Lessor
shall have the right at all  reasonable  times to inspect the  Premises and the
Improvements including inspection by Lessor's agents and designees.

                                  ARTICLE XIV.

                           Assignment and Subletting

         Section 1. Lessor  shall have the right to sell,  transfer,  convey or
assign, in whole or in part, its right, title and interest in the Premises.  In
the event of any such sale,  other  transfer  or  exchange  of the  Premises by
Lessor and  assignment  by Lessor of this Lease,  Lessor shall be and is hereby
entirely freed and relieved of all liability and  obligation  under or deriving
from this Lease,  provided  that such  purchaser  or assignee  shall  expressly
assume said  covenants  and  obligations  of Lessor  hereunder and shall have a
financial net worth at least equal to that of Lessor.

         Section 2.  Lessee  shall not  assign  this Lease or sublet all or any
part of the Leased Premises without the prior written consent of Lessor,  which
will not be unreasonably  withheld.  Lessor shall have the option, upon receipt
from  Lessee  of  written  request  for  Lessor's   consent  to  subletting  or
assignment,  to cancel this Lease as of the date the  requested  subletting  or
assignment is to be effective. The option shall be exercised, if at all, within
fifteen (15) days  following  Lessor's  receipt of written  notice,  by written
notice to Lessee of Lessor's  intention  to exercise  the option.  Lessor shall
not,  however,  be deemed to consent to assignment or sublease by virtue of not
responding  to the request by Lessee  hereunder  within such  fifteen  (15) day
period.  In the event of any assignment or  subletting,  Lessee shall be and is
hereby  entirely  freed and relieved of all liability and  obligation  under or
deriving from this Lease,  provided that such assignee shall  expressly  assume
said covenants and  obligations of Lessee  hereunder and shall have a financial
net worth at least equal to that of Lessee.

                                  ARTICLE XV.

                                   Mortgages

         Section 1. Lessee  accepts this Lease subject and  subordinate  to any
recorded mortgage or deed of trust presently  existing or hereafter placed upon
the Premises,  and to any renewals,  modifications and extensions thereof.  The
foregoing  provisions  shall be  self-operative  and no further  instrument  of
subordination  shall be required for the purpose.  Anything in the foregoing to
the  contrary  notwithstanding,  in the event of a  foreclosure  under any such
mortgage or deed of trust,  this Lease shall  continue in full force and effect
and Lessee shall attorn to the purchaser at such  foreclosure  sale, as Lessor.
Any such  mortgage  or deed of trust may at any time,  at the  instance  of the
holder  of the note  secured  thereby,  be  subordinated  to this  Lease,  such
subordination  to be  accomplished  by  the  execution  by  such  holder  of an
instrument of  subordination  and recording of the same in the recording office
where  such  mortgage  or  deed  of  trust  is  recorded;   provided,  however,
notwithstanding  that this Lease may be (or may be made to be) superior to such
mortgage  or deed of trust,  the  provisions  of the  mortgage or deed of trust
governing the rights of the mortgagee with respect to condemnation or insurance
proceeds  shall be prior and  superior to and shall  prevail  over any contrary
provisions  contained  in this  Lease  with  respect  to the  payment  or usage
thereof.

                                  ARTICLE XVI.

                 Rights of Landlord to Cure Defaults Generally

         Section  1. If the  Lessee  fails  to  perform  any of the  terms  and
conditions of this Lease which in any manner  adversely  affects  Lessor,  then
Lessor may, at its option,  proceed to cure said default by payment of money or
doing such other acts as may be necessary to cure the same and any sums so paid
or expenses so incurred  shall be promptly  paid by Lessee with the next rental
payment after thirty (30) days' written notice from Lessor.

         Section 2. Any and all sums paid or advanced,  or reasonable  expenses
incurred  for and on behalf of Lessee  provided  for in Section 1 above and any
and all rental  payments which are delinquent  more than thirty (30) days shall
draw  interest  at the (a)  "prime"  rate  charged  by First  Mississippi  Bank
National Association, or its successors, plus four percent (4%), or (b) maximum
rate permitted by applicable law, whichever is less.

                                 ARTICLE XVII.

                                    Default

         Section 1. In the event that a  voluntary  petition in  bankruptcy  is
filed on behalf of Lessee, or in the event Lessee be declared a bankrupt, or of
an assignment by Lessee for the benefit of creditors,  Lessor may at its option
declare  this  Lease  terminated  and  upon  the  making  of such  election  to
terminate,  all  interest  and  rights of Lessee to  possession  of the  leased
Premises and Improvements shall terminate.  Should Lessor not elect to exercise
its right to  terminate  this  Lease,  the Lessor may accept rent from any such
receiver or other  officer in  possession  of the Premises for the term of such
occupation  without  impairing  or  affecting  in any way the  rights of Lessor
against Lessee under this Lease.

         Section  2. In case  default  be made by Lessee at any time in the due
payment  of any sum  payable  by Lessee  under the  provisions  hereof and such
default shall  continue for a period of fifteen (15) days after written  demand
by Lessor to Lessee or if default shall be made by Lessee in the due observance
and performance of any other covenant,  condition or stipulation  herein agreed
by Lessee to be by it observed or performed,  and such default  shall  continue
for a period of thirty  (30) days  after  written  notice by Lessor to  Lessee,
detailing the particulars of such default and requiring Lessee to make good the
same,  then Lessor at any time  thereafter,  shall have the full right,  at its
election,  to exercise any of the following rights and remedies;  provided that
if such default is not reasonably  curable  within such 30-day  period,  Lessor
shall not be  permitted  to  exercise  any of its rights or  remedies if Lessee
commences to cure said default within such 30-day period and diligently pursues
the same to completion:

                  (a) To enter upon the Premises and again have,  repossess and
         enjoy the same as if this  Lease  had not been  made,  and all  terms,
         conditions,  covenants  and  obligations  of this Lease on the part of
         Lessors to be performed shall cease and terminate,  without prejudice,
         however,  to the right of  Lessor  to  recover  from  Lessee  all Rent
         accrued hereunder as of the date of such entry by Lessor;

                  (b) To pursue all other  rights and  remedies to which Lessor
         may be entitled hereunder, at law or in equity; and

                  (c) No waiver of breach of any of the covenants of this Lease
         shall be construed to be a waiver of any succeeding breach of the same
         on any other covenant.

         Section 3.  Notwithstanding  any termination of this Lease, the Lessee
shall continue to be liable to Lessor for the payment of any unpaid assessment,
tax, lien,  mortgage,  utility charge, or any other payment required to be made
by Lessee to the date of said cancellation.

                                 ARTICLE XVIII.

                                  Termination

         Section 1. Any building and  improvements and fixtures placed upon the
leased Premises by the Lessee shall be and remain the property of the Lessee so
long as this Lease shall remain in effect.  Upon  termination of this Lease, by
expiration of time, by agreement or by default of the Lessee,  any improvements
and fixtures, shall be left in place and become the property of the Lessor, its
successors  and assigns,  together with all rights  therein of the Lessee,  its
successors and assigns. To make this provision self executing, Lessee covenants
and agrees that, upon termination of this Lease,  title to all improvements and
fixtures  belonging to Lessee shall pass to Lessor,  its successors and assigns
forthwith  and without the necessity of any further  conveyance or  assignment.
Lessee agrees to execute any  conveyance or assignment if necessary to complete
such transfer if requested by Lessor to do so.

                                  ARTICLE XIX.

                                    Notices

         Section 1. It is mutually  agreed that any notice  given by the Lessor
to the Lessee shall be given either by (1) delivering the same to the Lessee by
personal  delivery  or by  overnight  delivery  or courier  service,  or (2) by
registered  or certified  mail,  return  receipt  requested,  postage  prepaid,
addressed to the Lessee at the following address:

         TO:                                Transit Group Transportation, LLC
                                            President
                                            Overlook III, Suite 1740
                                            2859 Paces Ferry Road
                                            Atlanta, Georgia 30339


         COPY TO:               Sharon McBrayer
                                Womble, Carlyle, Sandridge & Rice, PLLC
                                1275 Peachtree Street, N.E., Suite 700
                                Atlanta, Georgia 30309

and also,  that any  notice to be given by the  Lessee to the  Lessor  shall be
given either by (1) delivering  the same to the Lessor by personal  delivery or
by overnight  delivery or courier  service,  or (2) by  registered or certified
mail, return receipt requested, postage prepaid, addressed to the Lessor at the
following address:


         TO:                                Dan Horvath
                                            3300 Pointe South Cove
                                            Memphis, Tennessee 38125

         COPY TO:                           Boyd L. Rhodes, Jr.
                                            Baker, Donelson, Bearman
                                            & Caldwell
                                            2000 First Tennessee Building
                                            Memphis, Tennessee 38103

Any  assignee of Lessee or assignee of an assignee  shall  furnish its name and
address to Lessor in writing and upon failure to do so then notice to Lessee as
above provided will be deemed notice to assignee.

         Notice  sent by either  Lessor or Lessee by  certified  mail  which is
refused shall be effective upon attempted delivery.

         Section 2. All parties shall give the others  reasonably prompt notice
of any change of address,  and until such notice any party may rely on the most
recent addresses furnished. Neither Lessee nor Lessor shall designate more than
two (2) addresses to receive notices.

                                  ARTICLE XX.

                                     Merger

         Section 1. This Lease shall merge and terminate any prior  negotiation
and  agreements   between  the  parties  hereto   regarding  the  Premises  and
Improvements.

                                  ARTICLE XXI.

                                Memorandum Lease

         Section 1. The parties  agree that this Lease  shall not be  recorded,
but that at the election of Lessee or Lessor, a memorandum of this Lease may be
executed  and may be recorded in DeSoto  County,  Mississippi  or in some other
appropriate governmental office.

                                 ARTICLE XXII.

                                     Waiver

         Section 1. None of the  covenants,  terms or  conditions of this Lease
shall be in any manner altered, waived,  modified,  changed or abandoned except
by the written agreement of Lessor and Lessee duly signed and delivered. One or
more  waivers of any  covenant or condition by any party shall not be construed
as a waiver  of a  subsequent  breach  of the  same or any  other  covenant  or
condition by said party. The consent or approval by the Lessor to or of any act
by Lessee  requiring  Lessor's consent or approval shall not be deemed to waive
or render  unnecessary  Lessor's  consent or approval  to or of any  subsequent
similar act by Lessee.

                                 ARTICLE XXIII.

                                  Certificate

         Section 1. Lessee shall,  without charge, at any time and from time to
time within ten (10) days after written request by Lessor,  deliver to Lessor a
written  instrument,  certifying whether Lessor has or has not, as the case may
be, made any default in the  performance  by Lessor of all  agreements,  terms,
covenants  and  conditions on Lessor's part to be performed and if it does know
any default, specifying same.

                                 ARTICLE XXIV.

                                  Holding Over

         Section 1. In the event of holding over by Lessee after the expiration
or termination of this Lease,  the holdover Lessee shall be as a tenant at will
and all of the terms and  provisions of this Lease shall be  applicable  during
that  period,  except that Lessee  shall pay Lessor as rental for the period of
such holdover an amount equal to one hundred  twenty-five percent (125%) of the
Base Rent plus one hundred  percent (100%) of the  Additional  Rent which would
have been  payable by Lessee had the  holdover  period been a part of the Lease
Term.  Lessee agrees to vacate and deliver the Premises to Lessor upon not less
than thirty  (30) days'  written  notice from Lessor to vacate;  and during any
holdover  period,  Lessee shall be entitled to terminate  the holdover  tenancy
(and thereby  terminate its obligations  hereunder for Base Rent and Additional
Rent) by giving Lessor at least ninety (90) days' prior  written  notice of its
intent to vacate the Premises.  The rental payable  during the holdover  period
shall be payable to Lessor in the same time and manner as  provided  during the
Lease  Term.  No holding  over by Lessee,  whether  with or without  consent of
Lessor,  shall  operate to extend the Lease Term unless the parties shall agree
otherwise in writing.

                                  ARTICLE XXV.

                                  Confirmation

         Section 1. Lessor agrees,  upon the request of Lessee,  to execute and
deliver  to  Lessee,  a letter of  confirmation  confirming  that  Lessee has a
leasehold  interest  in the  Premises  pursuant  to the terms of this Lease and
certifying  whether  Lessee  is or is  not,  as the  case  may be,  in  default
hereunder and if Lessor does know of any default, specifying same.

                                 ARTICLE XXVI.

                                 Force Majeure

         Section 1. Neither  party shall be required to perform any covenant or
obligation in this Lease,  or be liable in damages to the other, so long as the
performance or non-performance of the covenant or obligation is delayed, caused
by or prevented by Force Majeure.

                                 ARTICLE XXVII.

                                Entire Agreement

         Section  1. This  Lease  contains  the entire  agreement  between  the
parties  hereto  and no term  or  provisions  hereof  may be  changed,  waived,
discharged  or  terminated  unless  the same be in  writing,  executed  by both
parties hereto.

                                ARTICLE XXVIII.

                               Partial Invalidity

         Section 1. If any provision of the Lease or the application thereof to
any person or circumstances  shall, to any extent, be invalid or unenforceable,
the circumstances  other than those as to which it is invalid or unenforceable,
shall be enforced to the fullest extent permitted by law.

                                 ARTICLE XXIX.

                                 Applicable Law

         Section 1. This Lease shall be construed  and  enforced in  accordance
with the laws of the State of Mississippi.

                                  ARTICLE XXX.

                                Article Headings

         Section 1. The article headings contained herein are inserted only for
convenience  of  reference  and are in no way to be construed as a part of this
Lease or as a limitation on the scope of the particular  Articles to which they
refer.

                                 ARTICLE XXXI.

                     Binding on Transferees, Grantees, Etc.

         Section 1. This Lease shall be binding upon the transferees,  grantees
and  successors  in  interest  of the Lessor and Lessee,  or any  assignees  or
sublessees of Lessee herein.  Nothing  herein,  however,  shall be construed to
allow Lessee to assign or sublet  contrary to the provisions and conditions set
forth in this  Lease.  Lessor is hereby  granted the right to assign its rights
under this Lease in accordance with the terms hereof.

                                 ARTICLE XXXII.

                            Relationship of Parties

         Section 1. The  relationship  of the parties  hereto is that of Lessor
and Lessee and it is  expressly  understood  and agreed that Lessor does not in
any way nor for any purpose become a partner of Lessee or a joint venturer with
Lessee in the conduct of Lessee's business or otherwise.

                                ARTICLE XXXIII.

                              Time of the Essence

         Section 1. Time is  expressly  declared  to be of the  essence in this
Lease.

                                 ARTICLE XXXIV.

                                   Quitclaim

         Section 1. At the expiration or earlier  termination of this Lease, as
in this Lease provided, Lessee shall execute, acknowledge and deliver to Lessor
within ten (10) days after written demand from Lessor to Lessee,  any quitclaim
deed or other  document  required by any reputable  title company to remove the
cloud of this Lease from the real property subject to this Lease.

                                 ARTICLE XXXV.

                       Provisions of Law Deemed Included

         Section  1. Each and every  provision  and clause  required  by law or
regulation to be included in this Lease shall be deemed to be included  herein,
and this Lease shall be read,  construed  and  enforced as though the same were
included  herein.  If, through  mistake,  inadvertence  or otherwise,  any such
provision or clause is not included herein or is incorrectly  included  herein,
then upon  application  of either party hereto,  this Lease shall  forthwith be
amended to include the same or to correct the inclusions of the same.

                                 ARTICLE XXXVI.

                       Election of Remedies Not Exclusive

         Section 1. It is  mutually  agreed by the  Lessor and Lessee  that the
various rights, powers, options,  elections,  privileges and remedies of Lessee
and  Lessor  shall  be  cumulative  and no one of them  shall be  exclusive  or
exclusive of rights and privileges granted to either party by statute.

                                ARTICLE XXXVII.

                                Attorney's Fees

         Section 1. In the event it is necessary  for either party to employ an
attorney to enforce  the terms of this Lease,  or file an action to enforce any
terms,  conditions  or rights  under  this  Lease,  or to defend  any action or
arbitration,  then the prevailing party in any such action shall be entitled to
recover from the other,  all reasonable  attorney's fees, costs and expenses as
may be fixed by the court,  and such attorney's fees, costs and expenses may be
made a part of any award or judgment entered.

                                ARTICLE XXXVIII.

                            No Broker or Commission

         Section 1. No broker or agent has been  involved  or  participated  in
this transaction,  and no commission or other fee shall be paid to any agent or
broker with respect to this Lease or the transaction contemplated hereby.






                    [EXECUTION SET FORTH ON FOLLOWING PAGE]


<PAGE>





         IN WITNESS  WHEREOF,  the  parties  have hereto set their hands on the
date and year in this Lease first written.

LESSOR:

HORVATH & HORVATH, LLC


By: /s/ Dan Horvath_____________________
Title: Chief Manager_______________________



LESSEE:

TRANSIT GROUP TRANSPORTATION, LLC



By: /s/ Philip A. Belyew________________
Philip A. Belyew, President




                                 EXHIBIT "A-1"
                              PROPERTY DESCRIPTION


PROPERTY IN DESOTO COUNTY, MISSISSIPPI:

         Lot 5, Olive Branch  Industrial  Park,  Section AA@, Fourth  Revision,
         situated  in Section  26,  Township  1,  South,  Range 6 West,  DeSoto
         County,  Mississippi  as per plat  recorded  in Plat Book 37, Page 52,
         Chancery Clerk=s Office, DeSoto County, Mississippi.